Wellington, Feb 2 NZPA - Constant legislative changes to KiwiSaver are adding costs to savers and superannuation funds, fund managers say, but they're seeking a few more changes to make it work smoothly.

The Association of Superannuation Funds of New Zealand (ASFONZ) today commented on feedback from two forums held last week involving nearly all the providers of KiwiSaver schemes.

The Auckland and Wellington forums, held in conjunction with Inland Revenue, discussed issues of concern among providers to allow the smooth rollout of KiwiSaver changes and workplace savings schemes.

ASFONZ chairman David Ireland said providers were looking to the Government for a period of regulatory stability for KiwiSaver.

"Constant rule changes have been costly for providers, ultimately impacting on KiwiSavers through direct costs and through the extent of resources that providers have had to commit to accommodating the changes," he said.

"Providers have had to meet considerable compliance costs which deliver little or no benefit to existing KiwiSaver members."

Mr Ireland said while the Government should not rush further changes, it needed to address concerns about some unintended consequences of changes already made, and remove anomalies from the original KiwiSaver provisions.

"These include the risk of consumers losing their first home buyers' subsidy if they reduce their member contribution from the current 4 percent to the 2 percent rate from 1 April 2009.

"Legal guardians signing up under 18s for KiwiSaver have often not understood the full consequences of their actions, and removal of the fee subsidy is another factor to be considered.

"In addition, the KiwiSaver Act currently prevents providers from accessing relief mechanisms under the Administration Act to allow for the cost-effective release of small balances to a deceased's estate."

The National Government has changed several elements of KiwiSaver introduced by the previous government, including lowering employees' minimum contribution to 2 percent of their weekly wages, matched by the Government, and removing tax exemption for contributions over the minimum 2 percent.

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